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So much has been talked about payroll in the accounting industry. Accountants have long discussed payroll challenges and errors and adopted solutions, such as the latest technology and outsourced payroll solutions, to make it a profitable service. Yet, payroll reporting remains in the clouds; a topic fairly overlooked for years.
Reporting is a crucial aspect of the payroll process. Even after you’ve compiled the numbers and gotten all calculations correct, your job does not end there. As an accountant, it is important that you ensure the timely reporting of your client’s payroll benefits and taxes to HMRC.
After all, HMRC’s watchful eyes are upon you, and when it comes to payroll reporting, the stakes are high. Get it right, and your clients stay in the clear. Get it wrong, and the penalties can be quite a nightmare.
In this blog, we’ll delve into the depths of payroll reporting: the challenges, the penalties, and, most importantly, the solutions.
The HMRC mandates every employer in the UK running payroll to report their employees’ pay, any payroll benefits, and deductions in a Full Payment Submission (FPS) on or before their payday.
Employers are also expected to share an Employee Payment Summary (EPS) to HMRC by the 19th of the following month.
As an accountant running payroll for your clients, these submissions are your responsibility. Even if you use outsourced payroll services, you must ensure that the necessary information has been shared with HMRC on time.
When it comes to payroll reporting, accountants often face a labyrinth of complexities. Here are some common challenges:
HMRC does not take kindly to late submissions. They can issue fines for each late filing, which can quickly add up. Avoiding these penalties requires a sharp eye on deadlines and a smooth process for data submission.
Recent data published by HMRC highlights the drastic effect of incorrect or absent payroll reporting on the bottom line for UK businesses. The report reveals that HMRC collected a total of £75,154,200 from firms that repeatedly infringed on payroll reporting requirements since 2020. Over a quarter of this amount was issued in the last financial year alone.
Whether it’s an error on your part or a miss by your outsourced payroll provider, the fine will be levied in your client’s name.
No client would like to be penalised for a job they didn’t do, right? Accountants are more than just number crunchers for clients; they now serve as trusted partners and financial advisors to businesses. This is what makes accurate and timely reporting even more crucial.
Failure to abide by the payroll reporting norms can levy penalties on your clients, breaking their trust and leading to discontent. It can lead to the end of a long-standing partnership and even end up damaging your reputation.
Now that we’ve explored the causes and consequences of delayed or incorrect reporting, it’s time to look at solutions to make your life easier. The two key solutions are technology and outsourced payroll solutions.
In today’s digital age, technology can be your best friend when it comes to payroll reporting. Here’s how:
Outsourcing payroll is a smart move that can free up your time to focus on more strategic financial tasks. It provides access to expert payroll providers, ensuring compliance with the ever-changing regulations. Not only are outsourced payroll services cost-efficient, but they are also a great way to increase accuracy, save time, and stay compliant.
Payroll outsourcing involves a business contracting with a third-party service provider to manage its payroll processes. The client provides employee data, and the outsourcing provider processes payroll, calculates wages, taxes, and deductions, and ensures timely payment to employees.
The provider also handles tax filings and compliance with relevant regulations, such as payroll reporting. This arrangement allows businesses to streamline payroll operations, reduce administrative burdens, and ensure accuracy and compliance with payroll-related tasks.
Yes, outsourcing payroll can be cost-effective for many businesses. It reduces the need for in-house payroll staff, saves on software and infrastructure costs, and minimises the risk of costly errors or penalties.
Additionally, outsourced payroll providers can offer scalable services, allowing businesses to pay only for the specific payroll functions they need. However, the cost-effectiveness depends on the size and needs of the business and the quality of the outsourcing provider.
Payroll reporting is a critical aspect of your role as an accountant, and navigating its challenges can be a daunting task. However, with the right tools and strategies, you can steer clear of costly penalties and ensure smooth sailing for your clients.
Embracing technology and outsourcing payroll are two key solutions that can make your life as an accountant more manageable and your clients’ businesses more efficient. So, stay informed, adopt the best practices, and keep your clients in the good graces of HMRC. Remember, in the world of finance, precision pays off.
As an accountant, you’re the navigator in the complex seas of payroll reporting. By harnessing the power of technology and considering outsourced payroll services, you can set your course for smooth and penalty-free sailing in the vast payroll reporting ocean. So, to all the accountants out there, may your spreadsheets be error-free and your reporting deadlines always met!
Need payroll outsourcing support? Call us on +44 208 146 0808 or fill in the form below to get started.
With a rich experience of curating content for various industries, Pooja believes in the power of words in marketing and building brands. She enjoys experimenting with different forms of content and is currently on a mission to add value to the accounting industry through her detailed and researched write-ups.
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